The NRF Big Show 2016 represented a platform for major retailers to confront and discuss the challenges involved in going digital, as well as an opportunity to explore the latest trends in online and offline strategies to improve the retail customer journey. One2Team was at the event, and we have attempted to summarize what are the key rules retailers should follow as they tackle any major digitalization initiative.
1. Start by asking fundamental questions.
Before defining a digital store strategy, retail executives must address fundamental questions at the core of the business case. Why go digital? What does it mean for us? How is it going to improve the consumer experience? What is the impact we expect on the business, on operations, on the brand? Investing upfront in the clear definition of purpose and strategy of any digitalization initiative is a necessary step to ensure that the right “digital” performance indicators are selected and tracked throughout the process.
2. Dare to invest.
Over the last 20 years, one of the main factors holding up the necessary transition to digital technology in retail has been the uncertainty of the business returns vis-à-vis the investment required. But digital technology is here to stay and it is key for retailers’ competitiveness: investing in it is a question of survival. Having a clear idea of the objectives and the right performance indicators will provide convincing arguments that the investment will pay off.
3. Center the approach on the store.
The key idea here is simplicity for the consumer and a streamlined customer journey. Think “user” rather than “consumer”. In the age of connected devices the ramifications for the customer journey will be radical. Unlike with online shoppers, it has always been difficult, if not impossible, to identify consumers in-stores. We have had imperfect instruments such as the loyalty card, which did little to personalize the customer journey and path to purchase. Today, technologies like beacons, apps or digital kiosks provide data and capabilities that fundamentally change the way consumers interact with the store environment and its staff.
4. Encourage consumers to interact with other consumers.
One of the hottest trends right now is to set up a community where consumers can interact with each other. Karl Lagerfeld is a prime example of this. The Karl’s Book (a digital guest book) gives visitors of the boutique an opportunity to share how much they love the brand and connect with their friends at the same time: an iPad is available in store, which consumers can use to like and share looks on their social networks, view the collection as they browse the displays and see any items not stocked in store.
5. Invest in and train your sales associates.
It’s important to give sales associates and store managers the training they need to get the most out of the new tools. Make their job easier and take the time to eliminate any glitches, any friction, any barrier to adoption, before, during and after rollout. This effort will strengthen the relationship between sales staff and customers and improve the customer journey. Employees at Nordstrom, for example, can take advantage of several technologies, such as inventory management system, mobile checkout and popular social apps, to know “not only what a customer has bought in the past, but what they like, and even what they shopped for but could not find”.
6. Gather market intelligence and respond.
One of the best practices that successful retailers implement is to monitor the market, emerging competitors, their strategies and new technologies and act as they see the landscape shift. For example, as UberEATS was being prepped for rollout, Pizza Hut, the pizza restaurant and delivery company has been forced to revise its business model in what is a historic change of strategy. That will result in a sweeping rollout of digital technology, such as an e-learning platform for delivery staff or the ability for customers to track their pizza en-route.
7. Work on digital transformation as you would on a project portfolio.
Think of digitalization as a large transformation project broken down into a number of projects, programs and experiments. Some may be wildly successful, while some may be less so, but if they are managed as individual endeavors, it will be easier to calculate the return on investment at each step, learn what is working, see if the overall portfolio is on track and adjust accordingly along the way.
8. Choose the project manager carefully.
A question that often comes up is “what kind of executives are best suited to managing digital transformation projects?” Is it the VP of retail operations? The head of the E-commerce division? The marketing manager? The CIO? The answer varies, but everyone agrees on the need to successfully break down silos: all key organizations in the company must have a stake in the initiative. What you don’t want is a lone wolf. Whoever is in charge must excel at communicating, sharing and extracting feedback from all organizations, from store development, to marketing, to IT, to sales.
9. Implement a management solution to support your digital initiatives.
Last but not least, you’ll need to equip your organization and your teams with tools and solution that create the conditions for success. Digital transformation initiatives are complex and large projects, that leave few business processes untouched. They require agility, the ability to anticipate issues, to take decision collaboratively and rapidly adjust course. Project collaboration solutions that are specifically designed for large multi-site retail deployment programs should be high on the priority list.